This is a great question! Many people don’t realize that setting up an estate plan with a revocable trust is not the final step to setting up a proper estate plan. Many individuals forget the most important part of estate planning – FUNDING. Funding the revocable living trust is the process of transferring assets from your individual name into the revocable living trust. To do this you physically change the titling on your assets from your individual name (or joint names, if married) to the name of your revocable living trust. You can view the revocable trust as the vehicle for bypassing probate, but if you don’t actually transfer assets into this vehicle, it will be empty and worthless. Likely, if an estate with a revocable living trust has many probate assets, then funding never occurred or only partially occurred.
Each different type of asset may require a different procedure to effectuate the revocable living trust funding process. For instance, the following are just some of the procedures for funding common assets:
- Real Property: To transfer real property into your Trust, a new deed reflecting the name of the Trust must be executed, notarized and recorded with the County Recorder in the County where the property is located.
- Security Interests: To transfer security interests into your Trust, an assignment of the contract/deed of trust reflecting the name of the Trust must be executed, notarized and recorded with the County Recorder in the County where the property is located.
- Banking Accounts: To transfer banking accounts including safety boxes you will need to provide your bank with a copy of the Trust Agreement or Certificate of Trust and then sign new signature cards as Trustee of your Trust.
- Public Stocks and Bonds: In the case of publicly held stocks or bonds, it will be necessary to work through a stockbroker or through the institution from which the assets were purchased.
- Private Stocks and Bonds: The transfer of privately held security instruments, such as stocks in a privately held corporation, can be accomplished simply by surrendering the existing stock certificates and having new stock certificates prepared in the name of the Trust.
For more information on Asset protection, Estate planning, Business Law and/or Probate please contact the attorneys of The Presser Law Firm, P.A.